Last week, we reported on a bombshell of a lawsuit filed by the Independent Physical Therapists of California (iPTCA) against Align Networks and its parent company, One Call Medical. Earlier this week, Work Comp Central reported that the suit has moved from state to federal court, following a request by the defendants.[1] Today, we take a closer look at some of the charges in the suit and examine the reasons behind the change of venue.

The iPTCA complaint starts with a bang. The very first sentence accuses the defendants of a “uniform practice of soliciting and receiving improper payments” for referring injured workers to providers on deeply discounted network contracts.[2] The suit goes on to detail One Call and Align’s alleged violations of a host of California laws, and for systematically manipulating the statewide processes meant to protect injured employees.

The 33-page onslaught of allegations never lets up. The second paragraph of the lawsuit accuses One Call, through its affiliate Align, of operating as a California workers’ compensation claims administrator without license or certification. Claims administrators hire Align to act as a sort of gatekeeper by assigning Align the responsibility for directing an injured employee’s care.

As the gatekeeper, Align is accused of sending injured employees to whichever provider agrees to accept the lowest treatment reimbursement. The lawsuit argues that this creates an illegal profit-driven incentive for Align to disproportionately refer patients to those providers who have succumbed to the steepest discounts.

Furthermore, the lawsuit alleges that One Call is maintaining a black box arbitrage model, preventing claims administrators and providers alike from accessing the actual information associated with bills and payments for treatment provided to injured employees:

“OCM’s clients do not have access to OCM’s provider contracts nor to copies of bills these health care professionals submit to OCM for payment. Indeed, OCM forbids health care professionals from including the contracted rate on their bills. Thus, OCM’s clients may likely not know how much of the money these clients have paid that OCM is retaining and not passing on.”[3]

The set-up goes like this: A provider sends a bill to Align. Rather than forwarding the provider’s original bill to the claims administrator, Align is accused of creating their own bill to forward to the claims administrator. So the claims administrator remits payment without ever seeing the provider’s bill, and Align pays the provider at a contracted rate, pocketing the change. The upshot? Both the claims administrator and the provider are denied access to critical information, and neither party knows whether the services, as billed by Align, were actually provided to the injured employee, and neither party knows the amoucnt pocketed by Align.

Meanwhile, Align and One Call seem eager to avoid a prolonged legal showdown. First, they petitioned a change in venue from California state to federal court, citing their out-of-state headquarters and the fact that the case exceeds $75,000 in controversy as reasons for the validity of such a move.[4] The petition was granted. Next, Align and One Call requested – and subsequently received – an extension from the court to postpone the filing date for their official response to the lawsuit. The hope here could be to reach some sort of settlement, though it’s unclear whether iPTCA would be receptive to the possibility. Either way, stay tuned – we’ll be back with more details in the weeks ahead.

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